Political PvP: Budgeting

January 9, 2013 By Jason Schmidt

In the online gaming world, ‘PvP’ stands for direct confrontations between players, often in a specifically designated battleground.

While this is not a game arena, nevertheless it is clear that there is a battle going on, ideologically, and it’s clearer that liberals got the jump on us. We conservatives keep saying what we’re not and what we are against, while they keep saying what they are and stand for. Now is the time to communicate our vision for the country. Let’s step up to get the message out!

The left is for big government, that’s clear. But being for smaller government is too weak and self-defeating a goal for us to carry as our vision. We are not just for smaller government, but for more self-governance: where we have fewer government programs because we just don’t need them. We are for a free people, which means free of debt, able to support ourselves, our families, and our neighbors when the need arises, all without the government’s help. As Conservatives, we are the voice of the American Dream, for all men and women who diligently seek it with hard and smart work, to find abundant blessing in the land of opportunity.

How can this happen? One side says that the best way to solve our economic problems is to gather all of the resources into the public sector, and then use those resources equally for the good of all. The other side says that the best way to solve the eco-woes is to minimize the economic impact of the public sector, and let the free market determine what gets done. This series aims to explore the various factors that effect the two sectors, and the impacts they have.

This first article is about the difference between budgeting in the private sector versus the public sector. It explains why a very successful business person in one sector may be a complete failure in the other.

In the private sector, the ‘top line’ (the money coming in) of the business is driven by actual market demand. This demand is directly effected by the quality of service or goods produced. Fulfilling more of the demand results in higher profits and a larger pool of cash to work with for the future, which can be applied to the same or to other purposes. The budget is flexible with the market, and wise businesses will save up sufficient funding to invest in a new line of business, or a building project, before they start it.

In the public sector, the top line is set by lobbying, and negotiating for a pre-specified budget based on a perceived demand. The demand for the product/service is likely to be fairly steady before a public sector entity will approve the budget. The perceived demand is much less directly effected by the quality of the service or goods produced. Fulfilling more of the demand could actually result in the perception that there is less remaining demand, and thus lower their budget for the next year. Public sector entities are very limited in how they can use the money they have, and one of these limitations is in savings: if they save up too much money for say a rainy day fund, it will be perceived that they have too high a budget and are taking too much of the taxpayers’ money which might be used elsewhere (not generally sent back to the taxpayer!), so their budget will be cut. Thus we have the year-end spendoffs, $500 screwdrivers, etc. There have been recent attempts to counter this to some degree by having multi-year budgets, but the longer the budget cycle gets, the less representation the public has in the budgeting.

The conservative principles I hold say that people who produce valuable things and make them available to others should be compensated 1) according to the value they are producing, 2) in a timely manner, and 3) by the people who value them. This practice encourages people to work harder at producing even more things of value, and at getting them to the right people. Since an individual person can only do so much, this practice also gives them the means and incentive to engage other people in producing valuable things. If there is not enough demand, the good/service is not something that people should continue spending their time on, they must eventually move on to doing something that is more valuable. These principles say that we should keep more in the private sector rather than the public sector.

“Don’t muzzle the ox who plows your field.”

“Let him who stole now work diligently, that he may have the wherewithal to give generously”

Jason Schmidt is the CEO of Quality Mountain Corporation, a software and process quality assurance company. He is also the President of Leolore Enterprises, a slowly growing company dedicated to providing educational resources for people to sieze ownership of their learning/education. Prior to this, Jason has worked as a software engineer and product manager. Jason and his wife have been married since 1995, and have seven children, which they raise on an acreage near Des Moines, IA.

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About Jason Schmidt

Jason Schmidt is the CEO of Quality Mountain Corporation, a software and process quality assurance company. He is also the President of Leolore Enterprises, a slowly growing company dedicated to providing educational resources for people to sieze ownership of their learning/education. Prior to this, Jason has worked as a software engineer and product manager. Jason and his wife have been married since 1995, and have seven children, which they raise on an acreage near Des Moines, IA.